How Treasury Got Its Bailout Money Back, In Charts

The Treasury Department has been trying to tell the public for years that its bank bailout program has been more financially successful than you think. Here are some charts showing they might be right.

Passed in October 2008, the Troubled Asset Relief Program authorized the government to spend up to $700 billion bailing out and holding up the financial system. Of the total authorized funds, $245 billion was spent on aid to banks, mostly in the form of buying direct investment stakes; $80 billion on aid to car companies; $68 billion on aid to prop up the insurance giant American International Group (AIG); and $8 billion on housing aid programs.

The Treasury Department, which regularly sends out updates on the program touting its financial returns, has been struggling to get the message across that much of the TARP money has been recovered, some $417.2 billion of the $420 billion spent, according to their calculations. And they may have finally figured out the way to do it: charts!

This chart shows the financial success of the most controversial TARP program, the $245 billion worth of aid to banks, mostly in the form of direct purchases of stakes in banks, along with warrants which allowed the Treasury to get a bigger return when banks eventually paid back the money. So even though there some stragglers, mainly smaller banks, the Treasury has gotten more than it put in the entire bank program. Some $65 billion went to just two banks, Bank of America and Citigroup, and the Treasury has gotten back just over $77 billion.

The calculation over the federal government’s return on its large amount of aid to AIG is still an ongoing debate.The Treasury sold the last of its AIG shares in December of last year. All told, the Federal Reserve and the Treasury committed $182 billion to rescuing AIG after it was on the brink of collapse following a credit crunch due to bad bets on derivatives linked to mortgages. The $67.8 billion AIG got from TARP made it the program’s largest recipient, with 16% of the program’s $245 billion worth of spending. The $72.9 billion the Treasury cites as its total cashback includes over $54 billion in return on the stock Treasury initially purchased through TARP and $17.6 billion in AIG shares that were transferred from the New York Federal Reserve Bank to the Treasury and sold by the Treasury along with its original TARP stake. The $17.6 billion is what puts the Treasury’s AIG investment into the black and is still hotly disputed by critics of the program.

The Treasury’s aid to car companies, including $51 billion to General Motors, is one of the bigger holes on TARP’s balance sheet. The Treasury’s gotten back $33 billion from GM, $11 billion of its $12 billion to Chrysler, and $6 billion of its $16 billion to Ally Bank, formely GMAC, the banking branch of General Motors. At its peak, the Treasury Department had a 60% stake in GM. Earlier this month, the Treasury announced that it would be selling another 30 million shares of GM stock. All told, Treasury has gotten back $50 billion of its $80 billion worth of aid.